Royale Energy, Inc. (OTCMKTS:ROYL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.Entry into a Material Definitive Agreement
On November 27, 2017, Royale Energy, Inc. (“Royale”) entered into a purchase and sale agreement to acquire a 50% non-operated working interest in oil and gas leases in the Sansinena and East Los Angeles fields operated by Matrix Oil Management Corporation (“Matrix”). The seller is Sunny Frog, LLC, a privately held California limited liability company, which is unaffiliated with either Royale or Matrix. The remaining 50% working interest in the leases being acquired are owned by Matrix. Upon completion of the pending merger between Matrix and Royale, the combined companies will own 50% working interest in these fields. The acquisition will add over 8.7 MBOE of net proved reserves to the merged company’s reserve base.
Following shareholder approval of the merger agreement between Royale and Matrix on November 16, 2017, Royale reached agreement on November 27, 2017, with the seller in which Royale agreed to pay $15 million in cash at closing for all of the seller’s interests in the two fields, subject to retention by the seller of a term overriding royalty interest in production of up to 300,000 barrels of oil from the leases. The overriding royalty interest will initially be 2.75% of production and increase after 2018 by 1.00% annually to a maximum of 9.75% until the 300,000 barrel limit is reached. The purchase agreement also contains customary representations and warranties by the parties and contemplates closing contemporaneously with the Royale/Matrix merger closing. Closing of the purchase is contingent on Royale’s arranging of acceptable financing.
Item 9.01.Financial Statements and Exhibits
Exhibits
ROYALE ENERGY INC ExhibitEX-99.1 2 ex99-1.htm EX-99.1 Exhibit 99.1 (ROYL) NEWS FOR IMMEDIATE RELEASE ROYALE ENERGY ANNOUNCES ACQUISITION OF REMAINING INTEREST IN MATRIX OPERATED SANSINENA FIELD San Diego,…To view the full exhibit click here
About Royale Energy, Inc. (OTCMKTS:ROYL)
Royale Energy, Inc. is an independent oil and natural gas producer. The Company is engaged in the production and sale of natural gas, acquisition of oil and gas lease interests and proved reserves, drilling of exploratory and development wells, and selling of fractional working interests in its wells to be drilled. The Company owns wells and leases located mainly in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana and Alaska. The Company sells a portion of the working interest in each well it drills or participates in to third party investors and retains a portion of the prospect for its own account. The Company owns proved developed producing and non-producing reserves of oil and natural gas in Utah, Texas, Oklahoma and Louisiana, as well as prospective shale oil property in Alaska. The Company has drilled over two wells in northern California.